Demand for beer may increase as affordability declines: Fitch

Rating agency Fitch states that the demand for beer may increase in the near future as the affordability for Sri Lankans may decline.

The US based credit ratings firm states that consumers may trade down from spirits to strong beer, given beer’s lower price point.

Moreover, Fitch forecasts that the drop in sales volumes will be moderated in the next 12-18 months, assuming an ease in inflation spikes.

Fitch also forecasts mild beer sales to rise on a gradual recovery in tourism.

Excise duties from alcoholic-beverage makers made up 11% of government tax revenue in the past year, however with the imposition of a social security tax of 2.5% on revenue in addition to the increase in Value Added Tax to 15% from 12% may increase the price of alcoholic beverages.